DETROIT — Ride-sharing, electrification, autonomous vehicles and staffing issues are going to roil the supplier industry and the way it sells parts and service to automakers, executives said last week during a panel discussion at the Automotive News World Congress.
"There are three immediate and critical issues facing suppliers today," said Julie Fream, CEO of the Original Equipment Suppliers Association:
- The global talent shortage of engineers
- The speed of technological change
- Market volatility and uncertainty.
Fream said suppliers association research has determined that, no matter a supplier's size or product, the biggest threat to its competitiveness is the struggle to recruit skilled workers.
"Almost every supplier is working to find ways to address limited human resources," Fream said
"The problem is far deeper than changing recruiting tactics," she said. "As companies employ up to four generations at the same time, much of the industry's traditional or old-fashioned work norms and environment need to change to meet the newer generation's requirements."
Bill Foy, senior vice president of engineering at Denso International, the giant Japanese supplier of alternators, air-conditioning components and engine control systems, views the disruption as an opportunity to broaden the company's products and adapt its corporate culture. He said acquisitions of smaller companies specializing in ride-sharing and data collection are helping Denso change with the industry.
"We are retooling our whole strategic vision as a company," Foy said. "Hardware remains very important for a vehicle, but we're also moving to services, which is a whole different mindset for us as a company."
Foy said the company is working on changing the mindset of employees. "How do we get the passion out of people, the maximum value and having them working on things that excite them?" he said.
Shiloh Industries, of Plymouth, Mich., which specializes in lightweight body parts and castings, already has undergone major changes as automakers have boosted fuel economy.
Shiloh CEO Ramzi Hermiz explained how the company transformed into a lightweighting specialist and more than doubled its revenue since the early part of the century, to $1 billion last year.
"We went from a base of three customers to the top six representing 50 percent of our business, all built on the backbone of lightweighting," he said.
As it has grown, Hermiz said, Shiloh, too, has faced recruiting issues. The company has launched an apprentice program and is working toward making recruits feel part of the team.
"Any change isn't easy," Hermiz said. "And we still have a lot to do."